Chase Bank saga revived as CBK, Deloitte are sued

Customers of the collapsed Chase Bank wait outside one of its Nairobi branches on April 7, 2016. PHOTO | EVANS HABIL | NATION MEDIA GROUP 

In Summary

• Good News Church of Africa and The Gospel Furthering Bible Church Trust have joined Muma & Kanjama Advocates in asking the High Court to order Chase Bank’s auditors and the CBK to cover the uncertain 25 per cent balance of their deposits.
• The plaintiffs have faulted Deloitte & Touche and the CBK for giving Chase Bank a clean bill of health despite the lender’s questionable operations that saw it close for over two years before being sold to Mauritius’ SBM Bank.
• Chase Bank’s former chairman Zafrullah Khan and ex-managing director Duncan Kabui have also been enjoined as respondents in the suit.
• The plaintiffs want the court to award them Sh127.6 million to cater for the 25 per cent hit they may take with Chase Bank’s collapse, and interest that they would have earned on their deposits.

   

By BRIAN WASUNA
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Law firm Muma & Kanjama Advocates and two church groups have sued the Central Bank of Kenya, consultancy Deloitte & Touche and owners of collapsed Chase Bank in what could open the floodgates for thousands of clients in collapsed lenders to get refunds for their losses, if the suit succeeds.

The plaintiffs have faulted Deloitte & Touche and the CBK for giving Chase Bank a clean bill of health despite the lender’s questionable operations that saw it close for over two years before being sold to Mauritius’ SBM Bank.

Chase Bank’s former chairman Zafrullah Khan and ex-managing director Duncan Kabui have also been enjoined as respondents in the suit.

THE TAKEOVER

SBM took over Chase Bank in August, 2018 after investing Sh8.6 billion in the collapsed lender. Chase Bank’s 3,100 depositors will access 75 per cent of their savings in three phases over three years.

The remaining 25 per cent will depend on whether the Kenya Deposit Insurance Corporation wins a recovery suit it has filed against Chase Bank’s shareholders.